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BUSINESS IN BRIEF 12/9   2008-09-12 - VNA

Vinaconex revenue hits 240 million USD

The Vietnam Construction Import-Export Corporation (Vinaconex) has announced its revenue for the first six months of the year was more than 4 trillion VND (240 million USD).

The figure represent an increase of 16 percent over the same period last year.

The corporation’s profit also rose 25 percent to 241 billion VND (14 million USD).

On September 11, Vinaconex with code VCG closed at 39.1 VND per share.

Hai Phong, Shenzhen embark on cooperation

The Shen Yue company from China ’s Shenzhen city will make a 200 million USD investment into building an industrial zone in An Duong district, Hai Phong city.

This is part of a memorandum of understanding outlining the bilateral cooperation between Vietnam ’s northern port city of Hai Phong and China ’s Shenzhen city.

The Shen Yue company committed to draw 150-200 foreign businesses to the industrial zone when it officially operates.

Construction on the 800ha industrial zone, which will prioritise investors in the making and assembly of electronics and electric equipment, and apparel products, is expected to begin late this year.

Shenzhen and Hai Phong authorities agreed to hold their annual meeting from now on to exchange information relating to trade, investment, tourism and services activities for possible cooperation programmes and plans in those fields.

They were also unanimous to open a Shenzhen-Hai Phong air route to serve investment and trade activities of the two cities’ businesspeople.

The port city of Hai Phong has so far this year lured 1.2 billion USD in foreign investment, which tripled the amount it drew in 2007. To the figure, 572.6 million USD was contributed by 31 new projects, and the remainder was additional capital of 16 existing projects.

To date, the city is home to 185 valid foreign-invested projects capitalised at 3.8 billion USD, with main investors coming from Taiwan , the Republic of Korea , France , Singapore , Hong Kong, the Netherlands and Thailand.

US officials talk about product safety

Acting Chairwoman Nancy Nord of the US Consumer Product Safety Commission (CPSC) told Vietnamese businesses to thoroughly study new US consumer product safety requirements before receiving orders to export goods to the market.

At a seminar on the issue held in Hanoi on Sept. 12, Nord said that her country’s President George Bush on August 14 signed an amendment to consumer product safety acts.

Businesses exporting their products to the US must get CPSC certification to ensure their product quality. Otherwise, they will be fined and their products will be destroyed.

Laurie Hopkins from CPSC, who is in charge of the Vietnamese market, said that Vietnamese businesses should strictly abide by product safety regulations during the manufacturing process.

According to the Ministry of Industry and Trade , Vietnam earned almost 5.7 billion USD from exports to the US in the first half of the year, a 20.7 percent year-on-year rise. Its major export items to the US include textiles and apparels, furniture, footwear, farm and seafood products, electrical equipment and machineries.

Vinalines, Chinese group set up sea port JV

A container port which will cover an area of 166 ha will be built in the southern province of Ba Ria-Vung Tau at an estimated cost of 300 million USD.

To this effect, the Vietnam National Shipping Lines (Vinalines) and the China Merchants Group Ltd. (CMG) have signed a contract to set up a joint venture company.

They planned to start the construction work in 2009 and finish it in 2011. The port will be able to receive 80,000 DWT ships.

Earlier, Vinalines and CMG had reached an agreement with the China Development Bank on credit granting to carry out the project.

VPBank to issue 12 million shares

The State Securities Commission has given permission to VPBank to issue nearly 12 million shares to its strategic partner Overseas-Chinese Banking Corporation (OCBC).

It was granted on the condition that VPBank issue shares in line with written documents from its annual shareholders’ meeting in 2007 and documents from the State Bank of Vietnam.

VPBank was also told to publicise its information on share volume, price and time. Within 10 days after the issuance, VPBank was told to report to the State Securities Commission about the results of the issuance.

SIMCO issues 2.1 million shares

Song Da International Manpower Supply and Trading Joint Stock Company (SIMCO) with code SDA has received official permission from the State Securities Commission to issue 2.1 million additional shares to pay dividends and bonus shares to its existing shareholders.

SIMCO was given permission on the condition that it issue shares in accordance with resolutions of shareholders and executive boards to ensure the interests of shareholders.

The company was also told to publicise information in the mass media within 10 days prior to issuance.

After successfully issuing shares, the company has to report the results to the State Securities Commission.

Local tech stock FPT turns 20

The Corporation for Financing and Promoting Technology (FPT), listed as a blue chip stock on the HCM City Stock Exchange, held its 20 th anniversary on Sept. 11, a significant mark in the development of local technology production and distribution.

Over 20 years, FPT has set up its own trademark as the most prestigious distributor of many well-known technology brands in the world such as Microsoft, IBM, and Hewlett-Packard (HP).

Distribution has become one of FPT’s key businesses, accounting for the majority of the corporation’s turnover. This year, the corporation projects to earn nearly 35 million USD from this sector alone.

”We will continue focusing on this sector in the future by cooperating with other well-known technology groups worldwide. FPT trademark will also be expanded overseas,” said FPT’s General Director Bui Quang Ngoc.

In 2002, FPT launched its first fully-assembled computer FPT Elead, helping the corporation tap into the computer assembly sector. This sector was developed further when FPT inked a deal in 2007 with HP and NEC to be a centre of computer assembly for the two companies.

In 2006, FPT signed with US-based Microsoft as a strategic partner. The agreement also helped FPT expand its trademark in the US by opening a representative office over there.

”What we have achieved in 20 years is thanks to the help of all of our members. We highly appreciated the efforts of each member, and will try harder to achieve more success in the future,” Ngoc said.

At the anniversary meeting, FPT highlighted its listing and the opening of subsidiary financial institutions.

In 2006, FPT officially listed 60.81 million shares on the HCM City Stock Exchange with an offering price of 400,000 VND. The share is now considered as a big stock with its performance impacting the development of the market.

”Through the listing, we promoted our corporation’s competitiveness in the local market, and expanded our marketing strategy to foreigners,” said Ngoc.

In addition, the listing brought FPT an effective channel of capital mobilisation for its projects, he added. “Though the contribution from the listing was small, it really gave us advantages in doing businesses.”

During the last two years, FPT began tapping into the business of finance, with the establishment of FPT Securities, FPT Capital Fund and Tien Phong Bank.

“The expansion into finances is helping us finance ourselves in the future. As well, the expansion has provided us with additional knowledge in doing points of producing and distributing technology,” Ngoc said.

Only sellers perform as VN-Index falls

The greater abundance of sellers on September 11 caused the VN-Index to fall past the sentimental 500-point mark, as well as making the market’s liquidity fall strongly.

The VN-Index slipped downwards on September 11 by a total of 17.44 points to end at 49.701.

Just 8 of 162 shares and fund certificates listed in the HCM City Stock Exchange gained points, while 6 remained unchanged and 148 tumbled.

All bigger stocks that had recently been showing promise, such as Vietnam Dairy Products (VNM) and PetroVietnam Drillings (PVD), re-slid down by huge levels.

The market’s trading volume on September 11 was only 15.95 million shares with a total turnover of 602.03 billion VND (36.5 million USD). These figures represented a reduction of 39 percent in volume and 30.07 percent in value from those on September 10.

Foreigners were net buyers on September 11, and purchases were concentrated on particular blue chips including Phu My Fertilisers (DPM), Song Da Urban-IZs Investment and Development (SJS), Hoa Phat Group (HPG) and Pha Lai Thermal Power (PPC).

SJS was the sole big stock to gain points in September 11 sessions.

The HASTC-Index of Hanoi Securities Trading Centre also continued slipping on September 11 to end at 169.29, a change of 3.37 percent, despite the rebound of the biggest market-capitalised company Asia Commercial Bank (ACB).

The northern centre saw 8.86 million shares change hands in the session, generating a turnover of 462.78 billion VND (28 million USD).

Malaysian developer starts on complex

Construction began on Sept. 9 for the 2.5ha Bien Hoa City Square, a modern complex comprising a five-star hotel, an office tower and hi-rise residential apartments.

The complex is being built in Bien Hoa City , around 30km from HCM City , by joint venture company Berjaya D2D.

The 230 million USD complex will have a luxury hotel of over 260 rooms, as well as a 20-storey office tower including a three-floor retail podium and one floor dedicated to recreational facilities. It will also have 550 serviced apartments.

Francis Ng, President of the Malaysian company Berjaya Land Berhad, senior partner in the joint-venture, said the complex would be completed in five years.

Berjaya D2D is a partnership between Berjaya Land affiliate Berjaya Leasure Cayman and the Industrial and Urban Development Joint Stock Company (D2D). The foreign partner has a 75 percent stake in the venture, with the remaining stock held by the domestic partner.

Berjaya Land has a licence in hand for an even bigger project, the 3.5 billion USD Vietnam International University Township, covering more than 900ha in the outlying HCM City district of Hoc Mon. This project is expected to kick off early next year.

The Malaysian developer’s other projects include the 930 million USD Vietnam Financial Center in HCM City and the 500 million USD Thach Ban New City in Hanoi.

First coffee trading floor to operate in December

Vietnam’s first coffee trading floor will formally become operational in December in Buon Ma Thuot city of central highlands Dak Lak province, announced Chairman of the Provincial People’s Committee Lu Ngoc Cu in Hanoi on Sept. 11.

The provincial leader told the press that the trading floor will be equipped with facilities reaching the world standards.

The event is part of the second Buon Ma Thuot Coffee Festival slated from Dec. 10-14, Cu said.

During the five-day festival, more than 150 domestic and foreign businesses will display their coffee products and coffee-flavoured products as well as coffee processing equipment and technology at almost 400 stalls.

Vietnam’s coffee exports fetches more than 1 billion USD each year, to which Dak Lak province makes up more than 50 percent.

Vietnam’s business potential introduced in US

Vietnam was among three emerging markets in Asia attracting interests from US businesses.

A workshop on investment and business potential in India , the Republic of Korea (RoK) and Vietnam was jointly held in East Brunswick city of New Jersey on September 10 by the US Department of Commerce, the PNC bank and transport company FEDEX.

Nguyen Manh Hung, Director of the Vietnam trade promotion centre in New York (VIETRADE New York) attended the workshop.

Donald Nay, a senior commercial official from the Trade Agency of the US Embassy in Vietnam , said that Vietnam is a potential market for American businesses operating in the fields of telecoms, aviation, transportation, medical equipment, banking and insurance.

But, he said, Vietnam needed to pay more attention to improving healthcare quality, infrastructure and environmental protection and curbing inflation in order to attract more businesses from the US.

The US became Vietnam’s second largest trading partner after China. Two-way trade between Vietnam and the US reached 12.53 billion USD in 2007

Credit level up, interest rates down for exporters

The Asia Commercial Bank (ACB) has decided to increase the credit limit to 50 million USD for export enterprises against the former level of 20 million USD.

The joint-stock bank has also decided to reduce the annual Vietnam dong interest rates down to between 7.3 and 8.5 percent for the “Post-export support” programme. The rates for the “Pre-export support” scheme will be down to 9-10 percent a year.

ACB is offering numerous export credit policies with priority given to rice, fisheries, rubber, apparel and wooden furniture industries.

High-profile exporters may have loans without mortgages to cover the entire export process, from buying raw materials until receiving payments from foreign clients.

Malaysian IT provider wants to be major player in Vietnam

Information technology (IT) services provider Formis Resources Bhd wants to be a formidable player in Vietnam’s IT market, said Formis Resources’s Chairman Megat Najmuddin Megat Khas.

“The Vietnam economy is booming and we want to be part of it,” he was quoted by local media as saying.

“We have already ventured into and met with some success in that country. We hope to build on this success and become a major player in Vietnam in the years to come,” he added.

Last November, Formis had, via its subsidiary, signed an agreement to computerise the trading management operations of the National Securities Inc (NSI), a Vietnamese stock-broking house in Hanoi.

Formis managing director Chan Ngow said the company had set up an office in Hanoi to assist in its operation in Vietnam.

"The Vietnam market is quite competitive but we believe we have the expertise to be successful there,” he said.

Spanish firm helps modernise electricity sector

A project on setting up a system of financial information for the Electricity of Vietnam (EVN) was launched in Hanoi on September 11 with the participation of INDRA, a premier IT company from Spain .

The project’s first contract, worth 8.3 million USD, aims to get an Integrated Finance and Materials Management System (IFMMIS) for EVN.

For the IFMMIS project, Indra will implement a proven best-fit software package, which complies with the laws and regulations of Vietnam and will be adapted to the unique characteristics of EVN on how it manages its finance, materials and HR.

Recently, INDRA signed an agreement with the Vietnamese Government to modernize the national electricity grid, focusing on production, transmission and distribution of power.

Coffee festival to kick off in December

As many as 150 domestic and foreign businesses will showcase their coffee products at the 2 nd Buon Me Thuot coffee festival to be held in Central Highlands Dak Lak province from December 10-14.

Seminars on sustainable development of the coffee industry, coffee processing and coffee export will be held on this occasion, said the provincial People’s Committee.

A contest to honour outstanding coffee makers and a photo contest on coffee images will also be organised during the event.

Dak Lak presently owns 180,000 ha of coffee, accounting for 35 percent of the nation’s total coffee area. It also makes up 60 percent of the country’s high quality coffee products.

The province plans to reduce the cultivation area to 150,000 ha by 2015 and use intensive farming methods to harvest more than 400,000 tonnes of coffee bean per year.

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